Financial Performance - The Group's total revenue for the year ended December 31, 2022, increased to HK$160.4 million, representing a growth of approximately 27.6% compared to HK$125.7 million for the year ended December 31, 2021[6][24]. - The profit for the year ended December 31, 2022, was HK$4.9 million, a significant recovery from a loss of HK$8.7 million for the year ended December 31, 2021[6][25]. - The gross profit margin improved slightly from 8.2% in 2021 to 8.4% in 2022, indicating stable profitability despite market challenges[24]. - The Group's revenue growth is attributed to increased sales of apparel products and agency fees from construction materials[22][24]. - The cost of sales rose by 27.3% from HK$115.4 million to HK$146.9 million, aligning with the revenue increase[30]. - Gross profit increased from HK$10.3 million in 2021 to HK$13.5 million in 2022, with a gross profit margin of 8.4%[30]. - Other gains amounted to HK$2.2 million for the year ended 31 December 2022, compared to losses of HK$8.0 million in 2021, primarily due to a decrease in expected credit losses[30]. - Selling and distribution expenses decreased from HK$1.8 million in 2021 to HK$0.7 million in 2022, attributed to reduced staff costs[33]. - Administrative expenses remained stable, increasing slightly from HK$8.1 million in 2021 to HK$8.3 million in 2022[33]. - Finance costs increased from HK$0.8 million to HK$1.6 million, reflecting an increase in bank borrowings[33]. - The profit attributable to owners of the Group for the year ended 31 December 2022 was HK$4.9 million, a recovery from a loss of HK$8.7 million in 2021[36]. Business Strategy and Development - The Group is exploring new business opportunities in the construction and related materials sector in ASEAN countries, initiated in 2020, to diversify income streams[9][13]. - The Group plans to develop a new business in health supplements along with supply chain management services to further diversify revenue sources[10][13]. - The management anticipates that the business environment will remain challenging until there are clear signs of improved customer sentiment and sales orders[7][6]. - The Group aims to expand its market presence through new product development and strategic marketing initiatives[58]. - The management team is focused on enhancing operational efficiency and exploring potential mergers and acquisitions to drive growth[58]. - The Group's strategic planning includes leveraging social media for marketing and global procurement to enhance distribution channels[58]. - The Group's commitment to innovation is reflected in its ongoing development of new technologies and products in the electronic components sector[55]. Corporate Governance - The report confirms that the information provided is accurate and complete in all material respects, with no misleading statements[49]. - The board of directors includes Mr. Ko Sin Yun as Chairman and other executive directors[53]. - The company has adopted a director nomination policy to ensure a balanced skill set and diversity on the board[54]. - The Group's executive director Mr. Ko has over 20 years of managerial experience and founded the Group in March 2010[55]. - Mr. Cheng, the compliance officer, has over 10 years of experience in asset management and corporate finance, having joined the Group in January 2017[58]. - Ms. Ng, appointed as executive director in January 2023, has extensive experience in marketing strategy and social media content management[58]. - The Company has adopted a board diversity policy to enhance competitive advantage through diverse board composition[92]. - The independent non-executive directors are responsible for overseeing management and providing independent judgment on strategy and performance[80]. - The Company has complied with all code provisions as set out in the Corporate Governance Code during the year ended 31 December 2022[122]. - The Board consists of three executive directors and three independent non-executive directors, meeting GEM Listing Rules requirements[160]. - The Company has extended the Required Standard of dealings to senior management, with no incidents of non-compliance noted[124]. - The Company prioritizes risks based on qualitative and quantitative analyses, focusing on likelihood and impact severity[131]. - Attendance records show that all directors attended 100% of board meetings, indicating strong governance and engagement[109]. Risk Management - The Board is responsible for evaluating and determining the nature and extent of risks in achieving strategic objectives, with the Audit Committee assisting in overseeing risk management and internal control systems[111]. - The Group acknowledges its responsibility for risk management and internal control systems, which are designed to manage risks rather than eliminate them[110]. - The Company has established four risk categories, including strategic and financial risks, to manage potential threats[130]. - The Company has adopted appropriate options for risk mitigation, including risk elimination and transfer strategies[147]. - The Company measures its risk management effectiveness by assessing implemented changes and their impact[154]. - The risk management process identifies current and emerging risks, categorizing them into strategic, financial, operating, and legal risks[169]. - The Company engaged an external professional firm to conduct an independent annual review of the adequacy and effectiveness of the risk management and internal control systems for the year ended December 31, 2022[187]. - The Board considers the risk management and internal control systems of the Group for the year ended December 31, 2022, to be effective and adequate[188]. - Whistleblowing procedures are in place to allow employees to confidentially raise concerns about financial reporting and internal control issues[188]. Shareholder Relations and Dividends - The company has adopted a sustainable dividend policy to balance shareholder expectations and prudent capital management[74]. - There is no pre-determined dividend pay-out ratio; the declaration of dividends is at the discretion of the Board[75]. - Historical dividend distributions are not indicative of future distributions, and any undistributed profits will be retained for future use[76]. - The company aims to maintain a balance between meeting shareholders' expectations and ensuring sustainable growth[74]. - The nomination committee will discuss measurable goals for achieving Board diversity and make recommendations to the Board[78].
细叶榕科技(08107) - 2022 - 年度财报